UK stocks slipped into reverse in early trading on Wednesday as a stronger pound pressured exporters, while investors mulled higher inflation, the economic impact from surging coronavirus cases and ongoing Brexit negotiations.
The benchmark FTSE 100 fell 0.3% in early deals at 6,345.72, while the more domestically focused mid-cap FTSE 250 recovered opening losses to stay roughly flat at 19,512.67.
The insurance firm RSA (RSA) and software infrastructure business Micro Focus (MCRO) were among major movers on Wednesday.
Business Secretary Alok Sharma said on Wednesday that Britain hopes to get a Brexit trade deal but the European Union must understand that it is now dealing with a sovereign nation, as he tried to put pressure on EU negotiators, news that will be closely watched by the UK's heavy exporters.
GREEN ROADS MOVE PULLED FORWARD
The UK Government also made the bold move of pulling forward the ban on on dirty diesel and petrol cars and vans to 2030, five years earlier than previously planned, as part of what Prime Minister Boris Johnson is casting as a 'green revolution' to cut emissions to net zero by 2050.
Johnson talked up plans to mobilise £12 billion of 'green' funding from government, with an extra £200 million earmarked for carbon capture schemes and green jobs creation, with promises to hike the UK's offshore wind power output from around 10 gigawatts (GW) now to 40GWs by 2030.
The news seemed to put some meat behind the UK's automotive and energy sectors on Wednesday.
Global shares pulled back on Wednesday as soft US retail sales fuelled worries that rising coronavirus cases could stifle a still fragile economic recovery, dampening the euphoria from vaccine trial breakthroughs.
Japan's Nikkei 225 dropped 1.1% at the close, while MSCI's broadest index of Asia-Pacific shares outside Japan was little changed, drawing support from better handling of the pandemic in much of the region. Major US markets all posted modest declines overnight.
Gold prices continued to edge lower due to hopes for several in-trials Covid-19 vaccines, although concerns over the economic impact from the resurgence of coronavirus cases in the US limited declines.
Oil prices fell after a bigger-than-expected build in US crude stockpiles stoked fears for weak fuel demand and a potential supply glut.
BOARD BACKING FOR RSA TAKEOVER
In corporate news, RSA Insurance topped the FTSE 100 leader board on Wednesday after it confirmed previously flagged bid interest. The company said it had received a cash offer worth £7.2 billion (685p per share) from Canadian insurer Intact Financial and Danish insurer Tryg, a deal that the board is backing.
Best known in the UK Britain for its More Than brand, RSA provides home, motor and commercial insurance and has large operations in Canada, Ireland and Scandinavia.
The shares rose nearly 4% to 672p, having jumped more than 7% at the start of November.
FTSE 250 enterprise software company Micro Focus (MCRO) jumped 22% higher to 330.5p after calling operating margins to hit the top of expectations this year despite an anticipated 10% fall in revenue.
Micro Focus's annual adjusted earnings before interest, tax, depreciation and amortisation margin was expected at around 39%, following operational improvement and cost cutting.
Consumers goods giant Unilever (ULVR) expects sales of its plant-based meat and dairy products to reach €1 billion over the next five to seven years, helped by growth of its Vegetarian Butcher brand and vegan varieties of Hellmann's mayonnaise and Magnum and Wall's ice cream.
Unilever shares, which have been on the back foot in recent days, drifted 0.7% lower to £45.34.
UK renewable power utility SSE (SSE) saw a £115 million hit to profit in the first-half of its financial year due to the pandemic, the company said on Wednesday. But the share price rose 0.8% to £13.585 as investors looked beyond this bruising one-off and focused on rising profit, boosted by the £500 million Ovo retail business sale completed in January.
Adjusted adjusted earnings per share (EPS) fell 34% to 11.9p, within the company's guidance ranged between 10p to 12.5p because of the pandemic. SSE said it expected to post adjusted EPS for the full year of 75p to 85p. It declared an interim dividend of 24.4p per share, in line with guidance.
Property developer British Land (BLND) slumped close on 3% to 496.6p as its first-half pre-tax losses widened to £757 million as rental incomes and the value of its properties fell.
The share price fall came despite British Land resuming its dividend, via an interim payout of 8.4p per share that was nevertheless down from 15.97p year-on-year.
The news appeared to drag on other landlords, with Hammerson (HMSO) and Shaftesbury (SHB) losing more than 6% a piece, although the latter was also hurt by a deluge of new shares flooding the market after its recent £297 million cash call.
ON YER BIKE BRIGADE BOOST FOR HALFORDS
British bicycles and car products retailer Halfords (HFD) reported first-half profits more than doubling as coronavirus social distancing restrictions continued to drive a cycling boom.
The firm said it made an underlying pre-tax profit of £56 million in the six months to 2 October, up from £25.9 million a year ago.
Cycling has increased in popularity as many Britons avoid travelling on public transport during the pandemic and increasingly view it as a health and leisure activity.
Mining giant Anglo American (AAL) edged up 0.1% to £21.42 after the value of rough diamond sales at its De Beers unit increased during the ninth cycle of 2020 to $450 million.
Thermal energy management and niche pumping specialist Spirax?Sarco Engineering (SPX) reversed 3.3% to £11.52, despite announcing that a decline in sales in the four months through October was less severe than in the first half of the year.
Spirax?Sarco said its operating profit margin was higher in the four months to the end of October than in the first half, supported by increased sales and continued cost containment.
Mining company Kaz Minerals (KAZ) shed 1.3% to 641.36p on announcing a one year delay to its Baimskaya project in Russia.
Storage company Safestore (SAFE) nudged 0.3% to 817p as its annual revenue climbed 6.9% after it boosted occupancy levels and storage rates.
Tool and equipment rental group Speedy Hire (SDY) fell 0.4% to 65.54p after it posted a 92% drop in first-half profit, but said it expected to post annual results at the top end of expectations as demand recovers.
